A former JP Morgan equity strategist believes that Bitcoin's value will soar to $25,000 (£19,000) per unit within five years. Tom Lee, also the co-founder of FundStrat Global Advisor, told Business Insider that in the short term Bitcoin is like a 'social network' that will rise steeply in value. He based his argument on a principle known as Metcalfe's Law, which states: 'the value of a network is proportional to the square of the number of connected users of the system'.

Lee explained that the creation of value in the future is going to be in the 'digital world'

While speaking to Sarah Silverstein of Business Insider, Lee said: "In the short-term we think Bitcoin has really followed very closely the idea of acting like a social network. Meaning the more engagement there is, the greater the value rises. And in the short-term, we think Bitcoin will reach at least $6,000 (£4,560) by mid-2018." He went on to give the example of a US shampoo brand which had an extremely successful advert in the 1970s about the word-of-mouth effect.

"If you double the number of users, you're more than doubling the utility value," he explained. "It's a little bit like the commercial in the 70s - when you tell your friends, and they tell their friends, and so on."

When asked about the long term, Lee said he saw Bitcoin replacing gold as an alternative mode of currency, while stressing that its immediate rise in value will be linked to it. He said: "What we were trying to do is recognise that the creation of value in the future is in the digital world. I mean, all future great business are going to be digital. And with that concept, Bitcoin represents a store of value because it's an encrypted - personal encrypted database, that for seven years hasn't been hacked. I mean, that is a way to store value. "And if personal information is our gold, Bitcoin is our digital gold. So we think that the gold market, which is $9 trillion (£6.8tr), and for a generation of investors gold was their store of value. I think this next generation of young people view Bitcoin as their store of value. And if it captures five percent of the gold market, it's worth at least $25,000 per unit

For those sceptical of Bitcoin, Lee went into some depth trying to explain what it is. "At the core, it is just a very well designed database. One that, because of the way the encryption is built into it, is very hard to crack," he said."So, unlike typical databases where the encryption key is held by central entity, Bitcoin has this thing called miners and nodes. That each of the nodes keeps a copy of the database, and therefore you need 51 percent of the nodes to agree on a transaction to say it's valid, otherwise it'll say it's a spoof transaction. "Which means that bigger the database grows, and the more miners there are, the harder it is to crack. So Bitcoin is encryption, but the encryption strength grows as there's more miners. And today, it's estimated that it would cost about $31 billion (£23.5bn) to create one fake coin." Essentially, as he went on to note, it would actually be harder to fake a bitcoin now than it would to break into an actual bank and steal physical money. Many of Lee's predictions were based on the fact that the younger generation sees less value in gold than previous generations (its value has largely stayed stable over recent generations), which represents a huge shift in how - and on what - we value currency.